Tag Archives: marketing funnel

The Apple Watch Is Just Another Example of Apple’s “Smart” Marketing Funnel

By now, you have probably heard at least some of the details regarding Apple’s new smartwatch.  I’ll mention a few of the highlights below.

1. Its battery life is 18 hours.

In comparison to some Android smartwatches, that’s actually an improvement.  However, when it comes to some notable smartwatches, including Pebble, that’s actually unremarkable.  There are some smartwatches on the market that can go as long as 7 DAYS between charges; Apple’s only comes in at 3/4 DAY, which means that you will have to charge every night at least.  Keep in mind too that that 18-hour mark is likely its maximum; the actual time will vary depending on your activity and will likely be less than the stated 18 hours.

As you would expect, Apple touted the features of the Watch in an attempt to mitigate any disappointment that may have been felt by the fact that the stated time of the battery life was just 18 hours.  Tim Cook stated that the “Apple Watch is the most advanced time piece ever created.”

2. The starting pricing tiers for the three types (Sport, Watch, and “Edition”) are $349, $549, and $10,000(!)

I think many equally wondered what the top-tier pricing would be for the “Edition” version, and I think some were amazed that Apple would go that high, thinking Apple would sell at a lower price than $10,000.  Of course, Apple is trying to market it as a luxury jewelry item, a major reason why they’ve promoted it in two Vogue magazines (U.S. and China), including a recent 12-page ad in the U.S. version.  Combined with the materials used to construct the watches (especially the Edition version, which has 18-karat gold) and a high profit margin, that’s why Apple is charging the amount that it is.

It still remains to be seen if the luxury market will open up its arms and wallets to the Apple Watch, being that this is new territory for Apple, never mind the fact the smartwatch industry has not taken off as many experts thought it would.

This September 9, 2014 New Yorker article, “Does Anyone Want a Smartwatch?“, shows the issues surrounding smartwatch makers to this point, and I think Apple will come across similar issues, especially when it comes to whether people actually feel they NEED one.  Yes, there will be devoted Apple fans who will want to get one just as they did the iPhone and iPad, but as that article mentions, those items replaced something before them and did it better.  The question is, “What is the smartwatch replacing?”

Some people don’t wear watches of any type, while others wear a $9.99-$29.99 timepiece that they like, think it goes well with their attire, and tells time (what a concept! :-).  These timepieces can easily last 5-10 years or longer (I’ve had watches work even beyond 10 years, and that can be without changing the cell battery; if I change the cell battery, I’ve had some watches work 15-20 years without an issue).

This brings me to my point about Apple’s “smart” marketing funnel once again being at play with its Apple Watch, and why getting 5-10 years or beyond of use with this current Apple Watch may be a period of time that never occurs due to the way Apple and virtually all tech companies operate.

If you’ve followed along with Apple products in recent history, you know that an iPhone or iPad model is released every year (give or take a few months).  It will often have the latest specs (or close to it) at the time it is released, then it quickly becomes outdated, just as virtually all technology does.  Apple will then release the next updated model with updated specs.  You’ve seen this with its smartphone: iPhone 5, iPhone 5c & 5s, iPhone 6 & 6 Plus; you’ve seen this with its tablet: iPad 4, iPad Air, iPad Air 2; you’ve seen this with its mini tablet: iPad mini, iPad mini 2, iPad mini 3.

In the not-too-distant past, many Apple fans were determined to get every updated version, just because every model seemed so new and innovative.  However, as time has gone on, I know of many Apple users who don’t get every version of the iPhone, not seeing the need to update because the newest model wasn’t that much different from the one they were currently using.  In addition, people were more willing to upgrade when their 2-year contracts run out, thus leading to them often skipping one model upgrade, at least.

The iPad has been similar, being that the technology upgrades weren’t that much different from the previous version, especially over the past few years.  Plus, in the iPad’s case, the full-size tablet has started to witness declining sales due to the smaller-sized tablet (iPad Mini line) and, most recently, the phablet-sized smartphone (iPhone 6 Plus).

Still, even with Apple users skipping some updates, they still were willing to upgrade their products, and in many cases, they had to.  Some of the newest iOS operating updates and/or current apps don’t work or work as well with older hardware versions (that have older operating systems or memory limitations- those who own an iPad 2 like me know this, especially when it comes to updating to iOS 8, which can take up over 25% of a 16GB iPad 2).  Thus, it was necessary to upgrade your hardware in order to continue receiving the benefits and conveniences of that technology.  This is true of Apple (as it is pretty much of every technology company).

Apple has also integrated this into its smartwatch as well, and that could be a potential deterrent for those who expect their timepieces to last a long time (i.e. 10 years or more).

On Apple’s part, it’s smart marketing because, this will encourage (and even force) users to upgrade their timepieces in order to continue gaining the benefits and convenience from the Apple Watch.  Apps that are used on the Apple Watch will likely need an updated operating system (either the most current or close to it) in order to continue functioning properly and giving the Apple Watch its greatest value.  Those who want to keep their Apple Watch version for a long period of time (say, 5+ years or more) likely won’t be able to upgrade the iOS operating system after a while either due to technology incompatibilities, lack of storage space, or some other reason (much like the issues with the iPad 2 and even with the iPad 3 and iPad 4).

Thus, I suspect that after two to three years (maybe five years, max), the current Apple Watch won’t be able to handle the iOS updates and/or the updated apps needed to give the Apple Watch its greatest functionality.  Thus, users will be faced with one of two choices- either purchase the newest (or at least newer) version of the Apple Watch or stop using the Apple Watch altogether.  For diehard Apple fans who like the watch and have grown accustomed to its features and conveniences, that may be nearly impossible to do.

Thus, Apple has employed its marketing funnel again in order to get Apple Watch users to become paying customers AND remain paying customers (and that doesn’t even include utilizing iTunes and Apple Pay, two more ways to keep these customers as RECURRING paying customers).  That is really what you want to see in a successful business- the ability to get AND KEEP paying customers in your funnel- that’s how you can make residual income long term, which is why Apple is doing so well in terms of revenues and stock price, as well as why it has so much cash on hand.

Therefore, if you really want to learn about marketing strategy and employ that into your own business and your own marketing methods, pay close attention to Apple’s product development and launch strategies – you can learn a great deal of how to set up your own product development cycles and marketing strategies in order to get customers to pay you and to keep paying you over a long period of time, while boosting and promoting your brand in the process.

 

Advertisements